How Much Risk Is Worth Additional Upside?

Keith Law’s list of the Top 100 prospects in baseball came out today, though you have to be an ESPN Insider subscriber in order to see the rankings. Since the content is behind a paywall, I’m not going to give away too many of the rankings, but there were a few things on the list that caused me to do some thinking, and those thoughts inspired this post.

The first thing I noticed was how heavy the list was on pitchers. There’s only two pitching prospects in the top nine, but then 12 of the next 16 spots go to hurlers, and overall, 49 of the 100 spots on the list are occupied by pitchers. It’s not exactly breaking news that young pitching prospects get hurt and flame out at rates much higher than comparable hitting prospects, so in order to compensate for the extra risk they bring to the table, their placement has to be justified through additional upside. Keith’s a smart guy and understands all this, and I’m sure he’d be able to make a valid argument that each pitcher on the list has enough potential to justify their ranking even with the understanding of greater risk.

This ties into the other thing I noticed while perusing the list, however – the top prospects, in most cases, have very little minor league experience. Bryce Harper, Manny Machado, and Jurickson Profar all rate in the top 7 after spending last year in low-A ball, and while they’re all big time talents, they’re not really the exception. Dylan Bundy and Bubba Starling are ranked highly despite having never played a professional baseball game, while Archie Bradley has them beat by just two innings in rookie ball last summer. With the exception of Harper – a special talent and unique prospect in many regards – these guys are all several years from the big leagues. While their physical talents are real, we also have less information about them than some older prospects who have spent a few years climbing the ladder. The less you know about a player, the higher your uncertainty around that player’s value has to be. Lack of knowledge translates to risk, and risk weighs down value.

I don’t know enough about prospects to say that Law’s rankings of these very young kids are too aggressive – he knows their upside better than I do, and I’m sure he spent a lot of time deciding how to balance the increased risk that goes along with players we know relatively little about. But, I do wonder if prospect valuation in general focuses too much on a player’s perceived potential and not enough on minimizing the chances of a player being a bust who never contributes a meaningful thing to a big league club.

For example, Yonder Alonso is the only 24-year-old on Law’s list this year, and he comes in at #69. Alonso’s been in the spotlight for a while, and people have had plenty of time to break down his weaknesses. We know he’s not a great defender, he doesn’t pull the ball with authority all that regularly, and he projects to be more of a doubles hitter than a home run guy despite playing a position where power is essentially mandatory. The three years Alonso has spent in the minor leagues have given us a lot of information about his abilities, and not all of that information has helped his stock as a prospect. We’ve had time to identify his flaws, and he’s had time to show us that they’re not things he can easily improve upon, or at least he hasn’t been able to as of yet. It’s hard to imagine a 24-year-old suddenly learning how to rip the baseball over the fence in the same way that you can with a raw 21-year-old. Alonso’s stagnated power development has lowered our expectations of his future potential, and in turn, has hurt his stock as a prospect.

However, there’s a flip side to this coin – we also know that Alonso’s contact skills are good enough to translate against high level pitching, that his approach at the plate is basically Major League ready, and that there’s enough juice in his bat that he can drive the ball the other way with regularity. His performance against both Triple-A and Major League pitching last year solidified our understanding of his strengths as well, and our confidence in our ability to project his future is higher than with pretty much any other prospect on the list. He’s the guy we know the most about, and that reduces risk, which in turn should raise his value.

However, I know it’s tough to get excited about a meh defensive first baseman with average power. What we’ve learned about Alonso leads us to think that he’s probably going to be a +2 to +3 win player, and he has limited star potential unless there’s an unexpected power surge coming. A scout I talked to recently compared Alonso to Wally Joyner with a bit less defensive value. Looking at their minor league numbers, the comparison fits pretty well.

	BA	OBP	SLG	OPS	BB%	K%	ISO
Joyner
AAA (1985)	0.283	0.363	0.440	0.807	11.0%	11.7%	0.157
1985 PCL Average	0.272	0.343	0.403	0.746	9.5%	15.1%	0.131
% Better Than Average	4%	6%	9%	8%	15%	23%	20%
Alonso
AAA (2010/2011)	0.296	0.364	0.478	0.842	9.7%	15.9%	0.182
2010/2011 IL Average	0.262	0.330	0.405	0.735	8.4%	19.3%	0.143
% Better Than Average	13%	10%	18%	15%	15%	17%	27%

The comparison isn’t perfect, as Joyner spent his full age 24 season in the Majors, so we’re comparing his just age 23 season to Alonso’s 23/24 seasons, but it’s not an issue that eliminates the usefulness of the comparison, especially considering how well Alonso hit in the big leagues when he was promoted.

Now, Joyner wasn’t exactly a star in his own time. He made one all-star team in 16 seasons and only finished in the top 20 in MVP voting twice. His best season was +4.2 WAR, and for his career, he averaged +2.9 WAR per 600 PA. And that was with some pretty nifty glovework – take his defensive value away, and you’re looking at a guy who was more like a +2.5 win player in most years. The Joyner comparison wasn’t meant to be a flattering one to Alonso – the scout was trying to imply how limited his upside actually was.

But, let’s keep in mind a realistic baseline for most prospects. Joyner produced +40.4 WAR over 8,000 big league plate appearances. He had seven seasons where he finished with +3 WAR or higher, and he posted a wRC+ of 110 or better in every season from 1986 to 1998. Yes, he had limited power, only averaging 15 home runs per 600 plate appearances over his career, but his ability to make contact, draw walks, and rack up doubles made him a pretty nice player for a long time.

Maybe Joyner is something close to the best case outcome for this kind of player type. After all, he stayed extremely healthy and hit better in the Majors than his minor league numbers suggested was likely, so rather than relying on just one comparison, I grabbed all first baseman over the last 30 years who have racked up 2,000+ PA in the big leagues and have posted an ISO between .130 and .170. This gives 45 players ranging from Greg Norton to John Olerud. The median offensive line from those 45 careers? 3,765 PA, .277/.344/.421, 105 wRC+, +10.5 WAR.

Joyner had the fourth best career of the bunch, coming in behind Olerud, Mark Grace, and Don Mattingly, all of whom were much better defenders than Alonso is. Perhaps a more realistic comparison for Alonso is Jeff Conine, who hit .285/.347/.443, good for a 107 wRC+. He hung around long enough to post +24.3 WAR. Even if we think he’s just going to turn into James Loney (+8.6 WAR to date) or Lyle Overbay (+13.0 WAR), there’s still some real expected production to be had, and there’s obviously upside beyond those guys.

I’m not suggesting that Alonso is a top 10 prospect in the game. I fully acknowledge that teams should and do prefer a reduced chance at getting a premium player over a safer guy who probably tops out as a solid everyday guy. But, it’s all a balancing act – you will trade some security for greater upside, but you shouldn’t just be willing to accept an unlimited amount of additional risk in pursuit of slightly higher potential returns. And, in looking at Law’s Top 100 list this morning, I just wonder if we’re getting that balance right. How many of these 18 or 19 year old pitching prospects are going to put up +10 WAR in the big leagues? History tells us most of these guys will never make it, and the ones that do will still likely fail to live up to expectations.

Is a 10% chance of becoming a quality starting pitcher for a few years before your arm starts to hurt really better than a 50% chance at being a league average player, especially when you can start producing that value immediately while the upside play requires a few years of deferred value? Have we just focused too heavily on upside when it comes to prospects, to the point where we’re now valuing lottery tickets over relatively sure things?

I can’t say that I have the answer to these questions right now, but I think they’re at least worth asking.